» Air India to receive assistance from Finance and Petroleum ministries

Air India to receive assistance from Finance and Petroleum ministries

Published: Saturday, July 25, 2009, 17:43 [IST]

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New Delhi, July25 (ANI): Extending a helping hand to Air India, the Union Government on Saturday asked the Finance Ministry to examine the extent of assistance to be given to the airlines.

The high-level committee, headed by Cabinet Secretary K M Chandrasekhar, set up to monitor Air India's cost cutting measures also asked the Petroleum Ministry to extend the credit limit initially for three months.

According to sources the high level committee has asked the National Aviation Company of India Limited (NACIL) to appoint a Cost Auditor to monitor cost reduction measures and operational efficiencies of Air India. In the previous year the national carrier suffered a loss of Rs 7,200 crore.

Officials of the airline made a presentation before the high-level committee on various cost reduction and revenue generation measures it plans to take up.

Speaking to the media after the meeting Chief Managing Director of the Air India Arvind Jadhav said, the government is with airline and would give full backing to the airline on its growth and cost-saving plans.

The airline would keep the committee updated on these plans at its meetings to be held every month from now onwards, Jadhav added.

Air India, which has been losing an estimated Rs 250 crore a month, has chalked out a turnaround plan aimed at generating Rs 3,000 crore through internal accruals over the next six months. The plan also includes steps to mobilise additional revenue of Rs 1,800 crore through cost cutting and savings, sources said.

The high-level Committee also asked NACIL to come up with a concrete cost reduction proposal, including replacing of the current Productivity Linked Incentive (PLI) with an alternative scheme, sources said. (ANI)